The New York State Department of Taxation and Finance issued a memorandum regarding changes to the New York tax laws affecting insurance independently procured from unauthorized insurers in order to conform New York law to the requirements of the Nonadmitted and Reinsurance Reform Act of 2010.
Read More New Tax Form for Insurance Independently Procured From Unauthorized Insurer in New York
Tax Related Developments
New York Rejects SLIMPACT
Unlike other several other states as we reported here, New York has enacted legislation as part of its budget bill that does not authorize the state to enter into the Surplus Lines Insurance Multi-State Compliance Compact (“SLIMPACT”), or any other surplus lines tax allocation compact. SLIMPACT is an interstate compact that is designed to, among other things, allow for the adoption of uniform standards across participating compact states and uniform tax allocation formulas on multi-state risks. …
Read More New York Rejects SLIMPACT
U.S. House of Representatives Approves Repeal of 1099 Reporting Requirement
As anticipated in our earlier blog post, the U.S. House of Representatives has voted on a bill that would repeal the IRS Form 1099 information-reporting requirements imposed by Section 9006 of the Patient Protection and Affordable Care Act. On March 3, 2011 the House approved H.R. 4 – Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011. …
Read More U.S. House of Representatives Approves Repeal of 1099 Reporting Requirement
Obama Proposes Tax on Excess Reinsurance Premiums paid by Cedents to Offshore Affiliates
President Barack Obama’s recently released Budget of the U.S. Government for the Fiscal Year 2012 (the “Proposed 2012 Budget”) would disallow the deduction U.S. cedents are currently permitted to take for “excess non-taxed” reinsurance premiums paid to their foreign affiliates. The Proposed 2012 Budget provides no further detail regarding the proposed disallowance, but projects that the disallowance would reduce the U.S. deficit by over $2.6 billion by 2021. …
Read More Obama Proposes Tax on Excess Reinsurance Premiums paid by Cedents to Offshore Affiliates
Ambac and IRS Come to Temporary Terms Regarding Dispute Over $700 Million in Tax Refunds
As previously discussed here, Ambac Financial Group Inc. has filed for bankruptcy for Chapter 11 bankruptcy relief with United States Bankruptcy Court for the Southern District of New York. …
Read More Ambac and IRS Come to Temporary Terms Regarding Dispute Over $700 Million in Tax Refunds
German Government Opposes US Legislation Limiting Deductibility of Reinsurance Premiums
Proposed legislation that would limit a tax deduction for reinsurance premiums paid to a foreign affiliate of a US insurer has drawn the formal opposition of the German government. Ambassador Klaus Scharioth, in a recent letter to House Ways and Means Chairman Sander Levin (D-MI), said that the so-called Neal Bill (HR 3424) “goes well beyond” the undisputed goal of combating tax avoidance and evasion and, as a result, conflicts with provisions of the German-US tax treaty. …
Read More German Government Opposes US Legislation Limiting Deductibility of Reinsurance Premiums
UK: Emergency Budget Heralds Insurance Premium Tax Rise
By Troutman Pepper Locke on
On 22 July 2010 the Chancellor of the Exchequer, George Osborne, presented his emergency Budget. The Budget set out measures to close the UK deficit by 2015-16, several of which will impact directly on the insurance industry. …
Read More UK: Emergency Budget Heralds Insurance Premium Tax Rise
Rhode Island 2011 Budget – Tax Implications for Surplus Lines Insurers and Medical Malpractice Joint Underwriters Association
By Troutman Pepper Locke on
The 2011 Rhode Island state budget, which was enacted as HB 7397A and signed into law June 2, 2010, amends the taxation statutes applicable to surplus lines insurers and the Medical Malpractice Joint Underwriters Association. Article 9 of HB 7397A contains both amendments. …
Read More Rhode Island 2011 Budget – Tax Implications for Surplus Lines Insurers and Medical Malpractice Joint Underwriters Association
Health Care Legislation Imposes Tax on Annuity Income
The Health Care and Reconciliation Act (the “Act”), signed into law on March 30, 2010, imposes a tax on annuity income to help pay for the multi-billion dollar reform package set forth in both the Act and the Patient Protection and Affordable Care Act, signed into law on March 23, 2010. Specifically, the Act imposes a 3.8% Medicare contribution tax on individuals who earn more than $200,000 a year, and couples who earn more than $250,000 a year.
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UK: Alastair Darling’s Budget Proposes Tax Break for Asbestos Trusts
By Troutman Pepper Locke on
Alastair Darling’s 2010 Budget includes provisions designed to help asbestos trusts which were set up by companies prior to 24 March 2010 to meet their asbestos liabilities. Under the proposal, the trustees of such a trust would be exempt from income tax, capital gains tax and inheritance tax retrospectively from 6 April 2006.
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Read More UK: Alastair Darling’s Budget Proposes Tax Break for Asbestos Trusts